News Brief Summary

  • Wisconsin lawmakers passed legislation this week providing an alternative path to CPA licensure that does not require 150 college credits, which typically equates to five years of higher education and which critics say constitutes a barrier to entering the profession. The state joins a rapidly growing majority of states.
  • According to Tammy Hofstede, president and CEO of the Wisconsin Institute of Certified Public Accountants (WICPA), the state Senate passed SB732 on Wednesday by unanimous voice vote, a day after the Assembly passed the companion bill. The new legislation creates a third path: candidates can become certified by earning a bachelor's degree, accumulating two years of experience, and passing the CPA exam. The original two paths (requiring 150 credits or a master's degree plus one year of experience and passing the exam) remain in place.
  • Hofstede said the bill takes effect immediately after being signed by Governor Tony Evers, with the signing likely to occur in March or April. She said, "We're just waiting for the governor to sign it." After that, "there's no waiting period, no retroactivity issues... anyone who meets the new law's requirements can apply immediately."

In-Depth Analysis

Since early last year, about 26 states have enacted new CPA pathway laws or modified rules to drive CPA licensure reform, lower barriers to entering the profession, and address the accounting talent shortage.

According to data from the Minnesota Society of Certified Public Accountants, which closely tracks licensure changes, legislative activity has surged this year, with 19 additional states advancing CPA pathway bills or rules, leaving only a few states that have not yet formally advanced new requirements.

The pace at which licensure reform has accelerated this year has surprised some accounting experts, who had expected these changes to continue beyond 2027. As previously reported by CFO Dive, the Massachusetts Senate passed a CPA licensure bill on Thursday, with the state House expected to vote in the spring or early summer, and the effective date currently set for January 1, 2027, according to Zach Donah, president and CEO of the Massachusetts Society of Certified Public Accountants.

Nevertheless, some states that have enacted CPA pathway laws, such as New York and Alabama, still need to determine specific implementation details.

For example, the law signed by Alabama Governor Kay Ivey on January 30 does not specify the educational requirements for licensure, delegating that decision to the Alabama State Board of Public Accountancy. According to Robin Pearson, director of government affairs for the Alabama Society of CPAs, he expects the board to approve the new format (requiring a bachelor's degree plus two years of experience and passing the CPA exam), effective by October 15.

Robert J. Pawlewicz, assistant professor of accounting at the University of Richmond, believes that most state CPA bills clearly list the pathways, and the rapid advancement will not lead to extensive additional follow-up work that would slow the actual implementation of the laws.

"In my view, the pace is still very fast, and I don't think it's because lawmakers are pushing details to the accounting boards," Pawlewicz said in an email.

Hofstede said Wisconsin benefited from not being a leading state. WICPA supported the legislation, which was introduced in November, after the state had the opportunity to "observe and learn" from legislation being developed in other states.

Although some large and Big Four accounting firms are cutting accounting staff, Hofstede believes the legislation is still necessary because accounting shortages persist in many areas. For example, she still hears that small businesses in Wisconsin struggle to find accountants to handle tax and audit work.

"We hear that many small firms are being forced to merge into larger firms, or that mom-and-pop shops are closing because they can't find the people needed to serve their communities and clients," Hofstede said. "The Big Four are a separate group. They usually have turnover, but this time there really hasn't been turnover, so I think that's why you see layoffs there."

For ongoing updates on CPA licensure changes, visit CFO Dive'stopic tracking page。